Recently AT&T held an investors conference where Chief Financial Officer(CFO) John Stephens had plenty to say. Stephens addressed earnings reports, pay-tv services vs. internet streamed video content and he even mentioned T-Mobile CEO John Legere. Stephens outlook on the affect T-Mobile has had on the market translates to just noise.
T-Mobile has done a lot to change the way the mobile industry works and in some respects they have succeeded. Though some of their tactics may have just been smoke in the wind. One in particular for example would be when T-Mobile offered to pay early termination fees for customers switching over from any of their competitors. This offer is still going with no sign of stopping, but this tactic has had little effect on AT&T. Stephens says, "The competition is more noisy than disruptive," To back that statement AT&T still added 625,000 contract customers with a net of 1 million new customers in Q1 of 2014-even with T-Mobile's ETF offer out there. Stephens said, "It doesn't appear that based on our results, there was much of an impact." Though the offer from T-Mobile is still working for them, just not in the way they may have wanted. T-Mobile added more customers than any other carrier in Q1-2.4 million new customers. It is unknown how many of those customers came from other service providers at this time. However Stephens still feels that won't last for long.
Specifically, Stephens feels that the ETF offer from T-Mobile is a great idea, just not for a long-lasting deal. Even taking somewhat of a dig at the company's professionalism, "It's not something that a company with a best-in-class balance sheet would jump into," Stephens commented. Though Stephens recognized that the mobile industry is switching gears, and there are still some aspects that need tweaking, like WiFi calling.
According to Stephens there are still plenty of security issues with WiFi replacing cellular traffic. After some development, this could be an option in his mind, but for now, it's just not safe. WiFi needs to stand side by side with cellular for now and not become an absolute substitute. Though data as a whole has become an aspect of the wireless industry that needs plenty of focus. Stephens says a lot of revenue is coming from the use of data more so than ever and speaks to the shift in the industry. Though the internet has already been tacking on cellular traffic, pay-tv services are next. Stephens calls this "over-the-top" media, which is any type of video programming viewed over an internet connection i.e. Netflix or hulu. Instead of paying for cable television, people are starting to just pay for internet connections and streaming their videos from the internet. As a cable provider, Stephens says AT&T is not worried about this transition. Stephens feels that AT&T is not as locked into pay-tv services, and has the freedom to move into "over-the-top" media sectors as well. Over all, AT&T is doing just fine, staying number two in the mobile industry and fighting their way to the top in cable. Stephens doesn't seem to be letting anyone get in his way.